Tue 07 Jan 2014
In December HMRC published a new guidance note, RDR3 which provides specific guidance on the statutory residence test (SRT). This guidance sits alongside the existing guide RDR1 – Residence, domicile and the remittance basis.
Note – these are the only two guides in the RDR series so far. As at 9 January 2014 there is no RDR2.
HMRC’s residence indicator has been upgraded to enable users to decide if one of split year cases 1-3 (year of departure) applies. Split year treatment may apply where a taxpayer started to live or work abroad during a tax year. Those three cases are: 1) starting full-time work overseas; 2) partner of someone starting full-time […]
The government made a commitment to raise the personal allowance to £12,500 and the higher rate threshold to £50,000 by the end of this parliament. The measures announced today have been billed as a step towards achieving this objective. The personal allowance for 2017/18 will be set at £11,500 and the basic rate limit will […]
The Government has released draft legislation and supporting documents for Finance Bill 2020/21 for consultation until 16 September 2020. There were also some new consultations and ‘calls for evidence’ announced. Included in the ministerial statement dealing with these matters was an announcement on the extension of making tax digital (MTD). The extension will mean […]
HMRC proposes to withdraw, with effect from 6 April 2016, the concession in EIM 03002 which allows professional practitioners to treat incidental income from offices/employments as part of their trading/professional income for income tax (but not NIC) purposes.
The Scottish National Party will present its draft Budget at Holyrood on 16 December. Scotland’s draft Budget was deferred from its usual time in September to allow the SNP Government to take account of Chancellor Osborne’s spending plans for the UK as a whole. The Scottish rate of income tax (SRIT) will be the biggest […]
Some, but not much, more detail has emerged about how the Government intends the new dividend taxation rules to operate from 2016/17. The Budget announcement could hardly have been thinner on detail. It mentioned a £5,000 allowance and rates of tax on dividends falling within the basic, higher and additional rate bands. At the same […]
On 6 April 2017 a simplification will be made that, for once, doesn’t flout the Trades Descriptions Act. The new deemed domicile rule will apply for all personal and trust taxation purposes unless something goes seriously wrong in the consultation process. New deemed domicile rule The Budget speech announced that non-domiciled individuals who have been […]
Leaving aside the niceties of a government feeling it necessary to impose a law on itself it is telling to consider what is and isn’t within the scope of the tax lock. We have been told that the target is for the standard Personal Allowance to reach £12,500 by 2020, i.e. for the year 2020/21. […]
Despite all the media hype around Inheritance tax and thresholds, there were no NEW announcements regarding Inheritance tax or were there? There was a cryptic comment in the Budget speech regarding restricting the use of deeds of variation as if these form part of tax planning which can be considered tax avoidance. Deeds of variation can be used within two […]
The introduction of the Personal Savings Allowance from April 2016 effectively abolishes tax on savings for 95% of taxpayers. Both basic and higher rate taxpayers will be able to benefit although higher rate taxpayers will only be able to benefit from half an allowance. The Chancellor announced in the Budget that from April 2016 basic […]
The latest help to buy initiative announced in the Budget will mean that the Government could be paying up to £3,000 towards a first-time buyer’s deposit. Everyone can have one but when is the best time to start? The new Help to Buy ISA is essentially a cash ISA into which the Government will pay […]
The announcement that tax returns will become a thing of the past has been broadly welcomed by those who need to complete one and with a certain sense of disbelief by those who deal with HM Revenue and Customs and their online systems on a daily basis. The Government’s vision is to create a digital […]
Auto-enrolment – The key question for FDs: How to fund it and still contain payroll costs? Many companies are still finding that preparing for auto-enrolment is their biggest objective and challenge. Mazars’ Employee Benefits team have recently undertaken a series of roadshow workshops to help companies manage this transition and are available to provide advice […]
The Government is proposing to stop tax relief advantages being claimed by workers engaged by ‘Umbrella’ companies on reimbursed business expenses that are not generally available to other workers. This will affect those workers who provide their services via employment intermediaries (umbrella companies) and who have put in place ‘salary sacrifice’ arrangements in order reduce […]
A tax change that the Chancellor didn’t mention in the House of Commons today will increase tax on shareholders of quoted companies that make a return of capital or pay a special dividend. These groups often give shareholders the choice of receiving the cash in income or capital form. Many shareholders don’t use their annual […]
In a decision that is now of historic interest as regards the particular scheme, the Court of Appeal decided that employees’ receipts under schemes implemented by Deutsche Bank (DB) and UBS in early 2004 were exempt from tax under provisions in ITEPA 2003 Part 7 as applicable at that time. A receipt that would otherwise […]
Occasionally a Tax Case is published and, even at its first reading, the heart of the experienced tax investigations practitioner sinks as he realises that the case is likely to be misquoted by HMRC as supporting such-and-such a principle. For instance, the recent case of Daniel Pittack v HMRC ([2014] UKFTT 670) which was heard […]
HMRC have announced the end of self-assessment for straightforward personal tax and trust cases as part of the ‘Making Tax Easier: Simpler Payment’ move towards fully digital tax accounts and the abolition of self-assessment. Powers will be included in the 2016 Finance Bill to enable HMRC to withdraw notices issued to individuals and trusts requiring […]
The Government’s consultation about taxing non-residents on their gains derived from UK-residential property goes further than simply extending UK CGT to make non-residents taxable on disposals of UK residential property in the same way as UK residents. The new rules will only apply to gains arising after April 2015. What will be chargeable? The extended […]
April 2014 sees the pension lifetime allowance (LTA) cut from £1.5 Million to £1.25M. HMRC estimate that 30,000 people will be immediately affected by the cut and the consequences of breaking the limit are significant, a potential 55% tax charge on a part of your pension funds. The lifetime allowance (LTA) is the maximum amount […]
Gifts to charities – whether of cash, shares or land – have for many years attracted an income tax write off. However for the first time the Social Investment Tax Relief (SI Relief) gives income tax breaks (as well as capital gains deferrals) on equity or debt investments in charities and other social enterprises. Social […]
Last weekend’s press had headline stories of the First Tier Tribunal (FTT) decision in Flanagan & Others v HMRC that the “working wheels” tax scheme was not effective. The press particularly highlighted the involvement of Chris Moyles, the former Radio 1 DJ. Three matters were considered by the Tribunal: were the participants carrying on a […]
On 21 February 2014 HMRC issued a Revised Technical Note and Guidance on the Salaried Members Rules for LLPs. It is clear the Government is pressing ahead with these changes despite significant resistance. These rules, as proposed, will apply from 6 April 2014 where members of LLPs are engaged on terms similar to employees rather […]
The Office of Tax Simplification (OTS) has now issued its second report on its review of employee benefits and expenses and the complexities in current legislation in this area. This report suggests radical reforms, building on the interim report issued in August 2013. However, it does not cover accommodation benefits and termination payments, which will […]
In P Donovan and related appeal (TC03188) the First Tier Tribunal rejected taxpayers’ appeals against HMRC’s determination that dividends paid to their wives should be assessed on them under ITTOIA 2005 s 624 (settlements in which the settlor retains an interest). Messrs. Donovan and McLaren each owned 40 ordinary shares (40%) of the company […]
In Dr Samad Samadian v HMRC [2014] UKUT 13 the Upper Tier Tribunal entirely confirmed the First Tier Tribunal’s (FTT) decision .The case concerned whether tax relief was available for the travelling expenses Dr Samadian incurred in travelling between different places of work, including his home. Dr. Samadian was employed by the NHS and provided […]
Changes announced in the Autumn Statement aim to prevent non-doms from using artificially constructed dual contracts to channel remuneration derived from UK employment through overseas employments to avoid UK tax by claiming the remittance basis. The changes included in the draft Finance Bill, which are subject to consultation, will exclude directors, senior employees and the […]
Under self-assessment, if HMRC are not satisfied with a taxpayer’s return an enquiry is opened. There is no statutory time period within which HMRC have to complete their enquiry. Only once a closure notice is issued by HMRC can the taxpayer bring a formal challenge to the line being taken by HMRC. The taxpayer has […]
HMRC expects to pass the necessary secondary legislation to activate the information exchange agreements with the Isle of Man, Guernsey, Jersey and Gibraltar as from 31 March 2014 and is consulting on the precise form of the SIs required. This is the expected follow-up from the signing of those agreements and will lead to HMRC […]
In TC03118: Robert Brown the taxpayer claimed income tax relief on the basis that shares had become of negligible value. The only point of contention was whether the shares were actually of negligible value at 2006, the point at which the claim was made. The company was involved in research and development activity to develop […]
The Upper Tribunal (UT) has upheld the First Tier Tribunal (FTT) decisions in the joined cases of Perrin and Ardmorewhich both concerned the obligation to deduct income tax from interest arising in the UK and paid to overseas loan creditors. Perrin concerned the obligation of an individual and Ardmore a company but nothing turned on this […]
Here we summarise some of the less prominent draft clauses for the 2016 finance Bill. These may have been announced before or represent little change in practice but they are all important because they all affect someone. Capital Gains Tax: disposals of UK residential property by non-residents These clauses: include non-residents’ CGT (NRCGT) in the scope […]
OK, we couldn’t resist: like kids staring at the goodies under the tree we just had to start opening our draft Finance Bill goodies early. And just like those kids we now just feel disappointed and queasy in about equal measure. Not for life, and won’t even see out the 12 days of Christmas, Patent […]
The Upper Tribunal (UT) has held that it is possible for a non-UK resident landlord of UK property (English Holdings (BVI) Ltd), which also had a UK PE undertaking a trade, to offset the loss of the PE’s trade (subject to corporation tax) against the profits of the non-resident landlord business (subject to income tax). […]
In this note we summaries some of the tax points from the main political party manifestos and highlight some issues taxpayers might like to consider (separate advice on the consequences of any action taken in response to the comments below should always be taken). If you would like to discuss any of these points, please […]
Finance Act 2019 introduced income tax on income of non-UK residents that was generated from UK sales exceeding £10m annually, and which derive from intangible property. This new measure applies from 6 April 2019, though there are a number of exclusions. A draft statutory instrument has been produced amending the rules, along with draft guidance […]
The Taxes Acts allow taxpayers to ask for an independent review of an appealable decision by HMRC. The review is carried out by an independent officer within HMRC’s Appeals and Reviews teams. However, recent evidence suggests that many taxpayers remain ignorant of their right to seek such a review, how to go about it or […]
The Government will apply income tax to offshore businesses making offshore royalty payments in respect of intangible property used to generate UK sales. This will apply from 6 April 2019. The charge will apply unless the entity is UK resident or tax resident in a jurisdiction with which the UK has a double tax treaty with […]
The Welsh Government has published its Budget proposals. Pages 16 – 22 of the Outline Budget Narrative cover tax policy and tax rates. In summary the highlights are: Welsh rates of income tax will not differ from those in the rest of England & Wales for the first year (so the basic rate will be […]
Less than a week to go before the Requirement to Correct (RTC) deadline of 30 September 2018 elapses. RTC requires taxpayers to make a disclosure of any undeclared tax (Income Tax, Capital Gains Tax and Inheritance Tax) arising before the 6 April 2017 from offshore matters or transfers. The 30 September is also a significant […]
Included in the draft finance bill legislation issued on 6 July 2018 on those measures affecting tax administration, were provisions relating to extension of offshore time limits for assessing certain taxes, extension of the security deposit regime, and profit fragmentation. HMRC has requested comments on the draft legislation by 31 August 2018. There were also […]
In a backbench revolt on 1 May 2018 the UK Government was forced to back new legislation which will introduce public ownership registers in Britain’s 14 overseas territories. The concept of public ownership registers was originally proposed by David Cameron and George Osborne back in 2013 and was to apply to non-UK companies following the […]
The UK Government has introduced a raft of legislation to address tax evasion and latterly tax avoidance. This has included; The Requirement to Correct legislation which has introduced punitive offshore penalties and extended assessing time limits for Income Tax, Inheritance Tax and Capital Gains Tax to 5 April 2021 and, Enhancing automatic exchanges of information […]
The potential application of IR35 legislation to deem the receipts of personal service companies to be employment income of the individuals operating through them, has been high profile news recently. Applying the IR35 legislation may not always be straight forward where the circumstances of a contract have some, but not all of the characteristics of […]
In its pursuit of stamping out tax avoidance HMRC complained to the Advertising Standards Authority (ASA) about misleading tax claims by the promoter, CDP Tax & Wealth Limited, which trades under the name Fiducia Wealth and Tax (FWT). FWT’s website advertised a tax planning scheme which it said could reduce Stamp Duty Land Tax bills […]
One of the areas where a consultation was announced was training; specifically the difference in treatment between training that an individual funds personally and that paid for by an employer. This is a key area of Government focus given the need to grow the UK economy, to innovate and to increase productivity. The consultation seeks […]
The process of devolving tax powers is well underway and we can expect to see a number of major changes in the following months and years. As regards Scotland, Revenue Scotland (RS) have an excellent web-site (which can be accessed here – including a regular Technical Bulletin) which contains a large amount of useful information […]
The documentation supporting the Chancellor’s 2017 Autumn Budget included confirmation that the draft anti-avoidance legislation published in September will come into effect from 6 April 2018, with only a few very minor updates. The purpose of the legislation is to tax payments from an offshore trust that are intended for UK individuals that may otherwise […]
It’s nearly 20 years since the Freedom of Information Act 2000 (FOIA) was created. The Act was designed to create a public right of access to previously-inaccessible information held by public authorities but over the years concerns have been raised that FOIA is effectively “toothless” as the legislation contains numerous exemptions which allow public authorities […]
The recent decision in HMRC v Root2tax Ltd and Root3tax Ltd [2017] UKFTT 696 (TC) has demonstrated yet again HMRC’s determination to challenge promoters of tax planning arrangements who fail to disclose under DOTAS (Disclosure of Tax Avoidance Schemes) schemes that seek to obtain a tax advantage. The case before the First Tier Tribunal (FTT) […]
It is said that the real sign that a ship is in trouble is not when the rats jump overboard but when the officers abandon it mid-voyage. If that’s the case, HMRC appears to be sinking because a number of its most Senior Members have departed in recent months. That well known magazine Private Eye […]
The government announced at the Budget on 16 March 2016 that legislation would be introduced in Finance Bill 2016 to reform the rules governing the deduction of income tax at source from payments of royalties. At the time, a detailed Technical Note was issued by HMRC covering the various issues. Of the various reforms, the […]
A group of members of a limited liability partnership (LLP) have persuaded a First-tier Tribunal (FTT) judge that they are not obliged to complete their personal tax returns on the basis of the information contained in the LLP’s partnership statement (the partnership’s ‘tax return’) if that statement is incorrect. This was the second recent challenge […]
The English Holdings ([2016] FTT 436 case provides a very interesting analysis of the legislation relating to the scope of income and corporation tax for a non-resident company. The company concerned, a British Virgin Island company, had a trading activity in the UK, carried on through a PE, and an investment activity. The latter was accepted […]
The result of the referendum for the UK to leave the EU was announced in the early hours today; a result with potentially very significant economic implications for the country. However, this is only the start, as the UK will not actually leave the EU for at least another two years, so whilst there is […]
Capital Gains Tax (‘CGT’) charged on gains realised on most assets will fall by 8% to 20% (10% for basic tax payers) from 6 April 2016. Long-term investors will be able to claim investors’ relief on gains realised after three years on disposals of new shares in unlisted trading companies resulting in many only paying […]
HMRC have issued draft guidance on the tax exemption for low value or ‘trivial’ benefits in kind, which is to be introduced from 6 April 2016. This new exemption will prevent companies from having to charge such benefits to tax (which would generally be dealt with though a PAYE settlement agreement) or agree concessionary treatment with […]
The changes to the taxation of dividends from 6 April 2016 will see the differential between the rate of income tax on a distribution (up to 38.1%) and that of capital gains tax (as low as 10%, where entrepreneurs’ relief is available) at its greatest in recent years. In anticipation of this, a number of […]
On 1 February 2016 ISA changes announced in the first Budget of 2015 come into effect: · replacement of cash withdrawn (“flexible accounts”); · reinvestment of Help to Buy ISAs not applied in a house purchase. Flexible accounts Any sum withdrawn from a cash ISA may be reinvested in the same ISA or a replacement […]
Following the Autumn Statement 2014 the government has consulted on new rules for the deduction of tax at source on payments of annual interest made on peer to peer (P2P) loans from April 2017. The consultation opened on 15 July and concluded on 18 September 2015. The result of the consultation has not yet been […]
The progress of the additional nil-rate band for residences has been rather slow and tortuous: first the basics of Residence nil-rate band (RNRB) were set out in the Summer Budget and Finance (No.2) Act 2015 but at that time nothing was said about downsizing provisions except that there would be some. The Draft Finance Bill […]
The Draft Finance Bill 2016 extends the deemed domicile rules announced for other taxes to IHT, so that for once the rules are consistent across all taxes. The content of the DFB shows minimal change from the announcements made in the Summer Budget. At that time it was not clear whether the new rule […]
HMRC has designated the market operated by The Channel Islands Securities Exchange Authority Limited as a recognised stock exchange under Section 1005 (1) (b) Income Tax Act 2007 with effect from 20 December 2013. Therefore as from 20 December 2013 all securities admitted to trading and listed on this market are: ‘listed’ for income tax […]
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